Grace Tsang, BridgePoint Financial Group | April 20, 2015 | Posted in Commentary
On December 12, 2014, the Ontario Superior Court of Justice in Barrie released its decision in Maxwell v. Luck, 2014 ONSC 7179 (CanLII). The endorsement dismissed the defendant’s threshold motion at trial and maintained the jury’s award of $108,000. This decision is significant for the Court’s review of the assessment on chronic pain conducted by the defendant’s expert. The action is also significant as the Court ordered a penalty against the defendant insurer for putting the plaintiff’s file in the threshold program.
In 2007, Ms. Maxwell was a 24 year old woman who was involved in a motor vehicle accident where her car was rear-ended by a truck. After the accident, Ms. Maxwell had to leave her job as an exotic dancer and had difficulty continuing her studies as a Developmental Services Worker because of the injuries suffered from the accident. She attempted to rehabilitate herself without success. The defendant insurer, Aviva, placed this file in its threshold program.
At trial, the plaintiff put forward Dr. Brian Alpert as her medical witness, an orthopedic surgeon who practices in the field of chronic pain. Dr. Alpert conducted a complete physical examination of Ms. Maxwell. Dr. Alpert concluded that she had suffered a whiplash injury as a result of the accident and that she was "permanently disabled, not totally but seriously for the rest of her working life by chronic neck and upper back pain and headaches."
The defendant relied upon Dr. Michael Ford, a spine and trauma surgeon at Sunnybrook dealing with serious fracture cases. Unlike Dr. Alpert, Dr. Ford did not practice in the area of chronic pain, and his physical examination consisted of watching her walk, do a neck extension and neck rotation. Dr. Ford’s report concluded that Ms. Maxwell had recovered from her injuries arising from the motor vehicle accident; any complaints of pain were due to issues unrelated to the accident.
While the Court was respectful of Dr. Ford’s background, it was critical of Dr. Ford’s approach to Ms. Maxwell when it came to assessing chronic pain:
"... I question [Dr. Ford’s] expertise in the area of chronic pain due to his offhand examination, his failure to test by palpation or to observe a variety of movements, and his very brief approach to her medical history which is by no means a simple one to understand, both orally and through the many records from the treating practitioners."
In conclusion, the Court found that Dr. Ford’s opinion did not meet the objective proof required for chronic pain files.
While the decision only deals with the threshold motion, as mentioned earlier, in a separate costs endorsement released on December 24, 2014, the Court awarded a penalty in favour of the plaintiff:
"However in this case I intend to follow Keam v. Caddey in applying a remedial penalty. This was a hard-nosed position which the insurer must realize would attract some censure by way of costs. See also Ross v. Bacchus  ONSC 7773, Ramsay J."
In both Keam v. Caddey, 2010 ONCA 565 and Ross v. Bacchus, the Court concluded that the defendant insurer had refused to participate in settling the file expeditiously and had conducted itself in a way to intimidate the plaintiff. Accordingly, s.258.5(5) of the Insurance Act was a "remedial penalty" which allowed the Court to consider this conduct when awarding costs to the successful party:
"Morden J.A. describes the costs sanction as a "remedial penalty". It is remedial because it is intended not only to compel compliance by insurers with an important statutory purpose, but also to provide a remedy to the other party who was deprived of the opportunity for an early settlement of the claim. It is a penalty because it is not intended to be merely compensatory of costs unnecessarily incurred by the other party or parties, as that objective is already addressed by other costs provisions of the Rules of Civil Procedure, but to provide a meaningful consequence to an insurer that elects not to comply.
"The legislature chose not to provide a specific cost consequence for an insurer's failure to participate in mediation, such as substantial indemnity costs against a losing defendant or deprivation of full costs of a winning defendant. Instead, the trial judge is accorded the discretion to determine the appropriate cost consequence in each case. In summary, where an insurer breaches s. 258.6(1), s. 258.6(2) requires the trial judge to ascertain the appropriate remedial costs penalty in the circumstances."1
In Ms. Maxwell’s case, the defendant insurer was ordered to pay a remedial penalty of $50,000 as punishment for placing the file in its threshold program.
This penalty is significant. Once a file is placed in Aviva’s threshold program, it forces a claimant to proceed to trial rather than settle. The remedial penalty serves as a wake-up call to defendant insurers to re-examine their policies for putting files in the threshold program and reassess the files that are already in the program to avoid similar penalties.
1Keam v. Caddey at paras. 28 and 29.
On May 1, 2015, the defendant sought leave to appeal to the Court of Appeal the remedial penalty decision. The Court of Appeal denied leave. A copy of the endorsement can be seen here.
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